YTD stands for Year-to-Date, which means the time period from the start of the current year, January 1, to the current date. It is used to calculate the performance of securities, including mutual funds, during the aforementioned period.
YTD helps traders and investors to measure the performance of securities in the current year, assisting them in creating a broader picture of the performance of the securities in a market scenario that has persisted in the current year.
In the context of mutual funds, YTD helps traders and investors in shaping an informed opinion about the performance of a mutual fund, including assessing its returns and growth since the beginning of the year to date. The YTD in mutual funds also helps in comparing the mutual fund’s performance during the current year with its past performance or overall performance.
YTD in mutual funds is particularly useful in assessing the funds’ response to the events and market situations that happened during the current year, allowing the trader or investor to make a short-term analysis. This makes YTD useful for short-term investment decisions, rather than a long-term indicator.
Types of YTD in Mutual Funds
YTD in mutual funds is used to assess multiple parameters that can assist a trader or investor in shaping an informed opinion for the funds’ short-term prospects. Here is how YTD in mutual funds can be used.
- YTD Returns of Mutual Funds: It is the measure of the profit or loss from the fund since the beginning of the current year to the current date.
- YTD Net Pay in Mutual Funds: It is the measure of net earnings of the investors during the current year till the current date. It is the net profit that the investor has earned during the current year, after deducting the taxes and other expenses.
- YTD Earnings of Mutual Funds: It is the measure of the gross earnings that an investor has made, during the current year till date, by investing in mutual funds.
How to Calculate YTD Returns in Mutual Funds
You can calculate the YTD return on your mutual fund investment if you know two parameters: one being the current value of the mutual fund, which is the value that is on the current date, and the second being the value of the fund at the beginning of the current year, January 1.
You can now use a simple formula to calculate the YTD returns in mutual funds.
YTD Return = [(Current Value − Initial Value) / Initial Value] x 100
For example, if the current value of the mutual fund is ₹1750 and its initial value, as on January 1 of the current year, was ₹1550, then your YTD return would be:
[(1750-1550)/1550] x 100 = 12.90%
It indicates that your investment in the mutual fund has grown by 12.90% during the current year.
How YTD in Mutual Funds Helps Investors?
YTD in mutual funds can be helpful to an investor for a variety of reasons, eventually helping them stay aware of the performance of the mutual funds and make informed investing decisions.
- Performance indicator: YTD in mutual funds can assist an investor in tracking the immediate, short-term performance of a mutual fund, which can help understand how the fund has responded to recent market events.
- Early warning: The YTD indicators in mutual funds can prove beneficial to an investor by providing early warning signs about the performance of a mutual fund, providing a crucial window to make adjustments accordingly and initiate risk management efforts.
- Short-term analyses: YTD in mutual funds provides crucial bits of information about the funds’ recent performance and helps forecast their likely performance in the coming weeks and months, which can assist an investor in devising a short-term investment strategy.
- Make Comparisons: The YTD data in mutual funds can be used for comparative analysis with the 1-year, 3-year, and 5-year data, which can help an investor understand the behaviour of the fund.
Read More AboutHow to Track Mutual Fund Performance?
Other Time Frames in Mutual Funds
YTD in mutual funds is one of the timeframes used for time-based calculation of returns, profit, and growth. However, there are other timeframes of equal importance that you should be aware of in making informed investing decisions.
- 1D: It is the measure of the performance of a mutual fund during today’s trading day. It is not of much essence for medium-term or long-term traders.
- 5D: It is the measure of the performance of a mutual fund during the past five trading days.
- 6M: It is the measure of the performance of a mutual fund during the past six months. It is an important short-term timeframe for mutual funds.
- 1Y: It is the measure of the performance of a mutual fund during the past one year, or 12 months. It is an important short-term timeframe for mutual funds.
- 3Y: It is the measure of the performance of a mutual fund during the past three years, or 36 months. It is an important medium-term timeframe for mutual funds.
- 5Y: It is the measure of the performance of a mutual fund during the past five years, or 60 months. It is an important long-term timeframe for mutual funds.
Conclusion
YTD in mutual funds is a crucial timeframe for measuring the funds’ performance and is used by investors in making short-term trading analyses. It should, however, be used with other time period-based performance results, like medium-range 3-year and long-range 5-year, to picture a broader image of the funds’ performance and extract more grounded analyses. The YTD in mutual funds helps investors in making informed investment decisions by providing them with an assessment of funds’ performance during the current year.
FAQs
What is YTD in mutual funds?
YTD in mutual funds refers to the performance of a mutual fund during the current year, which is from the beginning of the current year to the present date.
What is YTD in mutual funds used for?
YTD in mutual funds is used to know the fund’s growth during the current year.
What are the timeframes used to measure the performance of mutual funds?
In addition to YTD, the commonly used timeframes to measure the performance of mutual funds are 3-year, which gives a medium-term assessment, and 5-year, which provides a long-term assessment.
What are the YTD returns of mutual funds?
The YTD returns of mutual funds refer to the profit or loss made on the investment in mutual funds during the current year.
Should I check the YTD performance of mutual funds daily?
Mutual funds are usually used as medium-term or long-term investment products. An investor can monitor the YTD performance of mutual funds daily if it is for any specific purpose.
